INVISIBLE HAND: a systemic reappraisal
| Collection | International Encyclopedia of Systems and Cybernetics |
|---|---|
| Year | 2004 |
| Vol. (num.) | 2(1) |
| ID | ◀ 1779 ▶ |
| Object type | Discipline oriented, Epistemology, ontology or semantics |
Adam SMITH's invisible hand was a dubious — if not gross — presystemic simplification.
In words of P.M. ALLEN: “Because of the fallacious analogy with the approach to equilibrium of an isolated physical system, in some way, there was an ”invisible hand“ guiding the evolution towards the equilibrium state, and hence in some sense that ”governments“ or ”planners“ had only to alleviate marginal areas of socially unacceptable inequality or hardship while events moved inevitably towards the best solution… Our new (i.e. irreversible thermodynamics) perspective tells us that this is not the case, that a choice of futures may indeed exist, and that these possible futures are of different ”optimalities“, some being more ”efficient“ for certain points of view than others” (1980, p.279).
This, of course, complicates enormously the governance of economic, social and political systems, as it introduces subjective — that is controvertible and frequently contradictory - evaluations (which of course, were always present, if not acknowledged).
The “invisible hand” in fact, proposed a homeostatic model of economy and society, ignoring instabilities, threshold crossings, emergence and chaos. Such a concept is still implicit even in Keynesian economics and, of course in many technical tools used by economists.